Australian shares have slipped on Friday, with all sectors but energy trading in negative territory, weighed down by recession fears as US Federal Reserve officials showed little sign of slowing interest rate hikes. 

The ASX 200 closed down 55 points, or 0.8 per cent, to 6,763. Despite that, the benchmark index has enjoyed its best week in two years.

By 4:15pm AEDT, the Australian dollar was up 0.1 per cent, at 64.09 US cents.

Financials fell 0.7 per cent, with the big four banks shedding more than 0.3 per cent each.

Interest rate-sensitive technology stocks slipped 1.8 per cent after a sell-off on the tech-heavy Nasdaq.

Software firm Novonix tumbled 1.1 per cent and Megaport slipped 4.8 per cent.

On the flip side, energy stocks jumped 0.8 per cent, as oil prices rose overnight after OPEC+ agreed to tighten global supply with a deal to cut production targets by 2 million barrels per day, the largest reduction since 2020.

Karoon Energy surged almost 9.2 per cent, Woodside Energy advanced 0.2 per cent and Santos firmed 1.9 per cent.

Among individual stocks, Allkem rose 3.2 per cent after the International Finance Corporation agreed to lend the lithium miner $US200 million to finance a battery-grade lithium carbonate project in Argentina.

Academic and real estate sectors were leading the losses, down 1.9 per cent and 2 per cent respectively.

Among the worst performers were Iluka Resources (-6.3 per cent) and Domain Holdings (-4.4 per cent).

AGL, Grok Ventures at loggerheads

AGL Energy on Friday recommended its shareholders vote against three of the four directors nominated by Grok Ventures, citing their addition would not add to the board's effectiveness, a move that the top stakeholder plans to oppose.

Grok Ventures and AGL have been embroiled in a months-long tussle that has forced the country's top power producer to ditch its demerger plans, accelerate the closure of its coal-fired power plants by a decade, and announce plans to spend up to $20 billion on renewable energy by 2036.

Late last month, tech billionaire and green activist Mike Cannon-Brookes — who has been vying for more influence and control at AGL — nominated four directors to the power producer's board through his private investment arm, Grok Ventures.

"Given the depth of energy market and transition experience already represented on the renewed AGL board, the board is of the view that appointing all four of the Grok candidates would not add to the overall effectiveness of the board," AGL said.

AGL will only support the nomination of Mark Twidell, who will prove to be a valuable addition to the board, the Melbourne-based company said ahead of its annual general meeting on November 15.

Mr Twidell most recently worked as a director for Energy Programs at Tesla TSLA.O, and was also an independent, non-executive director at the Clean Energy Council of Australia.

"Even with the endorsement of Mark Twidell to the board, renewal is not complete and we disagree that the incumbent directors have the breadth of skills required to execute … this transition," a Grok Ventures spokesperson said in an emailed response to Reuters.

Grok — which owns 11.28 per cent of AGL — will again engage directly with the firm's shareholders to push for election of its remaining three candidates to the board.

Shares of AGL lost 2.9 per cent to $7.11.

US stocks lower

On Wall Street, the Dow Jones Industrial Average dropped 1.2 per cent, to 29,926.

The S&P 500 fell 1 per cent, to 3,744, while the Nasdaq Composite dropped 0.7 per cent, to 11,073. 

The best-performing sector was energy, which was up 1.3 per cent. Utilities was the biggest drag, down more than 2 per cent. 

US investors are waiting for jobs data that will help inform the Federal Reserve's next rate hike.

Investors took brief comfort in economic data that showed the number of Americans filing new claims for unemployment benefits increased more than expected last week.

Initial claims for US unemployment benefits rose 29,000, to a seasonally adjusted 219,000, for the week ending October 1.

Chicago Fed president Charles Evans was the latest to spell out the central bank's outlook on Thursday, saying policymakers expected to deliver 125 basis points of rate hikes before year's end as inflation readings had been disappointing. 

"The market has been slowly getting the Fed's message," said Jason Pride, chief investment officer for private wealth at Glenmede.

"There's a likelihood that the Fed, with further rate hikes, pushes the economy into a recession in order to bring inflation down," Mr Pride said.

"We don't think the markets have fully picked up on this."

Oil prices up

On oil markets, Brent crude rose 1.4 per cent, to $US94.73 a barrel, while West Texas crude was up 1.2 per cent, to $US88.95 a barrel.

The gains follow a decision from the world's major oil producers to make steep production cuts to drive up prices.

Elsewhere, spot gold was flat, trading at $US1,722.22 an ounce.

In Europe, the pan-European STOXX 600 index lost 0.6 per cent, Germany’s DAX dropped 0.7 per cent, and Britain's FTSE fell 0.8 per cent.

ABC/Reuters